A year of significant progress and transition in Retail
This morning SSE has published its full-year results statement, setting out how the SSE group as a whole performed in 2017/18. This year’s statement has a strong emphasis on the way in which the SSE is adapting and evolving to create long-term value, seeking to give each of its businesses the best platform for success.
As part of this focus on transition, for the first time we’ve included within the Retail section of these results a breakdown of the performance of SSE Energy Services, our household energy and essential services business in GB. This follows the internal restructuring which was completed on 1 April this year to complete this separation process, which began back in 2014, with more formal separation between Wholesale and Retail.
We’ve also reiterated in the results statement our belief that the separation of SSE Energy Services from the SSE group and, subject to the necessary shareholder and regulatory approvals, combination with npower to create a new, independent, listed retail company in Great Britain can deliver real benefits for the business, its customers and the energy market as a whole.
A significant amount of progress has been made since we first announced the planned merger at our half-year results last November.
- approval to proceed with the merger was granted by innogy (npower’s parent company)’s Supervisory Board in December;
- planning for the integration of the two businesses is progressing well, using a third party managed process to preserve SSE’s and npower’s independence from one another;
- we’ve engaged constructively with the Competition and Markets Authority (CMA) before and throughout its Phase One investigation into the merger;
- we’ve announced the appointment of Katie Bickerstaffe, Chief Executive of UK and Ireland at Dixons Carphone plc and former Non-Executive Director of SSE plc, as the Chief Executive Designate of the new combined organisation – a position she will take up later this year, from which point she will lead the integration planning work;
- the CMA has commenced its ‘Phase Two’ investigation, which has a deadline of 22 October 2018 for the publication of its final report;
- we’re on course to publish a shareholder circular on 27 June, in advance of a vote at SSE’s General Meeting on 19 July; and
- further appointments to the senior management team designate of the new company are expected to be made in the coming weeks and months.
All of this represents real progress and we remain confident that the transaction is on course to complete in the final quarter of 2018 or first quarter of 2019. However, until such time as the necessary approvals are in place and the transaction is completed, we continue to operate completely separately from npower, competing as normal. With that in mind, we’ve also set out today the four key strategic priorities that will help us respond to the ‘core’ challenges of intense competition, increasing operating costs, regulatory intervention and evolving customer expectations:
- attracting and retaining more customers;
- reducing our cost to serve and driving efficiencies;
- delivering smart meters in a safe, cost-effective and customer-centric way; and
- building on our customer-centric culture.
We can be pleased with what we’ve set out in the results statement highlighting all we’ve achieved in all these areas in 2017/18. But we know we need to redouble our efforts this year to ensure we meet the challenges head on and continue to deliver for our customers – and that’s exactly what we’re doing.